Georgia Becomes a World Leader in Bitcoin Production
In basements dotted across Tbilisi, an unusual product is being harvested. It’s not tomatoes or vegetables, but crypto currency. As blockchain has taken the world by storm, Georgia has emerged as an unlikely world leader in Bitcoin production. Spotcoin, a Tbilisi-based crypto currency company believes that Georgia currently harvests 15% of the world’s crypto currency, just behind China.
What makes Georgia such a hotspot for mining the currency? Firstly, Crypto currency can be accessed much more easily in Georgia than in many other countries. You only need to go to an ATM in some malls, or casinos and drape shops to find it. Two leading crypto currency operators, Bitfury and Birtvi are also present in Georgia, whilst May this year saw a crypto currency conference take place in Tbilisi.
Secondly, electricity is relatively cheap in Georgia. The machines used to mine crypto currency consume huge amounts of power. Farms must be set up with cooling fans to prevent the crypto machines from overheating, which can often eat up a large percentage of the profits. However, the low electricity costs in Georgia thanks to hydropower, allow farmers to retain larger profit margins.
Despite the relative ease of mining in Georgia, it is far from a get-rich-quick industry. Bitcoin investors are slow to come to the country in part due to the vague stance of the government surrounding mining. Currently, many miners go by the ethos “if it’s not forbidden, it’s allowed,” but many investors require greater security.
The costs to set up a farm can be huge. Some experts have seen Georgians optimistically sell much of their property in order to set up their crypto farms, only to loose everything as the market fluctuates. Machines, often bought from China, can cost thousands of dollars, although some miners have made profitable businesses by helping others to set up their own farms and taking a cut of the profit.
Even if farms make a profit, it is somewhat unpredictable. The increasing value of Bitcoin seemed unstoppable until December 2017, after which its value plummeted to under $4000 less than a year later. Its change in value can happen fast – in a matter of hours not just days. The income earned from each bitcoin mining has dropped from around $4500 per bitcoin unit to $75-85 per unit.
Despite the insecurity of crypto currency, many experts believe that it is here to stay. Although no guarantee, Bitcoin and other crypto currencies could potentially offer Georgians a chance to rake in huge income in the future. If the government takes a more secure and encouraging stance, the industry could continue to grow in Tbilisi basements.
By Amy Jones